2. Product Market HouseholdFirms Resource Market Government

3. Product Market HouseholdFirms Resource Market Government Sell Inputs to Production Purchase Inputs to Produce Sell Goods and Services Consumption of Goods and Services

4. Product Market HouseholdFirms Resource Market Government Income from Factors of Production Resource Costs (Nominal) Revenue from the Sale Consumption Expenditures

5. Product Market HouseholdFirms Resource Market Loanable Funds Pay Taxes Government Foreign Buying and Selling of Goods and Services

6. Product Market HouseholdFirms Resource Market Loanable Funds Government Foreign Budget Deficient Save (Excess Funds) Borrowed Funds (Investment)

7. Product Market HouseholdFirms Resource Market Loanable Funds Government Foreign Supply (excess funds) Imports and Exports Borrowed Funds (Investment)Save (Excess Funds) Budget Deficient Buying and Selling of Goods and Services Pay Taxes Revenue from the Sale Consumption Expenditures Income from Factors of Production Resource Costs (Nominal) Sell Goods and Services Purchase Inputs to Produce Sell Inputs to Production Consumption of Goods and Services